International Advisory and Monitoring Board on the Development Fund for Iraq

Press Release
January 30, 2006

Statement by the International Advisory and Monitoring Board on the Development Fund for Iraq

The International Advisory and Monitoring Board (IAMB) on the Development Fund for Iraq (DFI) met in Paris, France on January 23, 2006 and issued the following statement:

"The IAMB met to continue its oversight role over the use of resources of the DFI, which is the principal repository for Iraq’s oil-export receipts and continued to oversee audits of the DFI.

"In accordance with the IAMB Terms of Reference, the nomination and appointment by the Government of Iraq of the DFI external auditor is subject to approval by the IAMB. Representatives of the Government of Iraq briefed the IAMB on the evaluation process to select an external audit firm to conduct an audit of the resources and disbursements of the DFI and of the oil export sales from July 1, 2005 to December 31, 2005. The IAMB approved the process and concurred with the recommendation of the Government of Iraq to proceed with the audits which are expected to be completed by mid-May.

"The IAMB followed up on the results of the special audit of sole-sourced contracts, and in particular the Kellogg, Brown and Root (KBR) task orders funded from the DFI. The U.S. Government informed the IAMB that a global settlement of all six DFI funded task orders under the KBR contract was reached between the U.S. Government and KBR on December 22, 2005. The settlement provided for a reduction of contract costs of US$9 million. The IAMB resolved to request an independent verification of the settlement as well as a review of the remaining sole-sourced contracts to determine whether excess costs were incurred that would be the subject of renegotiation.

"The IAMB welcomed the action the Government of Iraq is taking on the implementation of IAMB recommendations, but also reiterated its concern that key actions, especially the installation of an oil metering system, were taking a long time to implement. The IAMB urged the Government of Iraq to implement all IAMB recommendations promptly."